Switzerland - branch office or local GmbH

[DomOCT]

Hi all,

Assuming one is temporarily moving to Switzerland for work (for up to 3 years), but wants a company on the side for freelancing work, would it better to have something like a dormant UK LTD with a Swiss branch office instead of a full-blown GmbH?

I don't know about the cons, but the benefits (from what I've read) would be easier corporate tax residency change (in case of moving from Switzerland to some other country later on), lower overall costs and no minimum share capital compared to a GmbH.

Thoughts?

 

[aniglo22]

Switzerland doesn't allow redomiciliation, so I would advise against a Swiss Gmbh.
I would simply register as a Selbstständiger, which would save on compliance work and costs.

 

[DomOCT]

aniglo22 said:
Selbstständiger
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Valid option, but I would like to avoid personal liability

 

[aniglo22]

DomOCT said:
Valid option, but I would like to avoid personal liability
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Yeah then go for the branch route

 

[JustAnotherNomad]

Switzerland has exit tax on companies. I guess it could also apply to Swiss branches of foreign companies - or maybe not? Either way, it could influence your decision.
I don't have experience with this, but I could imagine it might be better to just set up a Swiss company and properly wind it down when you move.
You should speak to a Swiss tax advisor about this.

 

[DomOCT]

JustAnotherNomad said:
I guess it could also apply to Swiss branches of foreign companies - or maybe not?
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I assume it would, but I'm not going to be accumulating any assets within the company so it wouldn't be an issue.

 

[daniels27]

Exit tax is payable on goodwill. You do not need assets to be eligible to taxation. You do get a tax credit on goodwill on inward migration of a company.

The proper way is Selbstständiger as @aniglo mentioned with unlimited liability. If you need a limit in liability, there are other options and it depends a lot on the business and turnover and what you have now. Most likely the easiest is to keep your own company running wherever it is and apply for a ruling with the Swiss that you pay out 95% of gross profit as personal income and get it taxed in Switzerland as Selbstständiger (subject to AHV). For higher volumes you may want to appoint your friend as director and then invoice your Selbstständiger a salary to be taxed in Switzerland.

Branches etc. only make sense if you have existing structures or have substance elsewhere. Otherwise, it is the same as a GmbH but with quite some additional hassles.

 

[JustAnotherNomad]

JustAnotherNomad said:
You should speak to a Swiss tax advisor about this.
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Basically this.

 

[drillbill]

daniels27 said:
Exit tax is payable on goodwill. You do not need assets to be eligible to taxation. You do get a tax credit on goodwill on inward migration of a company.

The proper way is Selbstständiger as @aniglo mentioned with unlimited liability. If you need a limit in liability, there are other options and it depends a lot on the business and turnover and what you have now. Most likely the easiest is to keep your own company running wherever it is and apply for a ruling with the Swiss that you pay out 95% of gross profit as personal income and get it taxed in Switzerland as Selbstständiger (subject to AHV). For higher volumes you may want to appoint your friend as director and then invoice your Selbstständiger a salary to be taxed in Switzerland.

Branches etc. only make sense if you have existing structures or have substance elsewhere. Otherwise, it is the same as a GmbH but with quite some additional hassles.
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what would you suggest without responsibility ?

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